The bank will test real-time settlement of Japanese government bonds using the Canton network to cut processing time from days to seconds.
Mitsubishi UFJ Financial Group will launch a proof-of-concept to settle Japanese government bond trades on blockchain, aiming to reduce settlement times from 1-3 days to real-time. The trial uses the Canton network to enable 24/7 onchain transactions, improving capital efficiency for repo markets.
Traditional JGB settlements typically take one to three days, while blockchain-based systems like JPMorgan’s Kinexys have demonstrated intraday settlement for U.S. Treasury repos since 2020. MUFG’s initiative mirrors similar projects in Europe and the U.S. targeting faster, more efficient bond markets.
The bank expects the technology to enhance operational workflows, particularly for short-term borrowing and lending transactions involving JGBs, which are widely used due to their liquidity and credit quality.